New York Times: "G.M.'s Efficient Brazil Plant Raises Fears Closer to Home."
June 17, 1998 By KEITH BRADSHER
DETROIT -- The strikes now crippling General Motors,
while partly about short-term job security and
workplace safety disputes, reflect a larger struggle over
whether America's auto industry will adopt the manufacturing
techniques now being introduced at new factories in countries
like Brazil.
GM's operations in Brazil have copied Japanese
manufacturing practices on a massive scale, and have
become the company's most profitable, efficient and flexible.
When GM introduced new mid-size sedans in the United
States and Brazil two years ago, a Kansas factory took seven
months to make the switch while the Brazilian factory
reached full production in just three months.
The last two presidents of GM's Brazilian operations, G.
Richard Wagoner Jr. and Mark Hogan, now run GM's North
American operations and are trying to apply Brazil's lessons
here.
"We can take what we've learned in the manufacturing and
technology in Brazil and apply that in the United States, and
that's every bit my intention," said Hogan, GM's vice
president for small cars, in an interview last year in Sao
Paolo.
Outside suppliers in Brazil are assembling many of the parts
for new cars before delivering them to the assembly plants --
sending partially assembled dashboards, for example, instead
of speedometers, gas gauges, radios and glove boxes.
Automakers used to bolt all these parts together inside an
assembly plant, and GM still does in the United States, even
though this occupies a lot of costly floor space and increases
labor costs.
But where GM sees efficiency, the UAW sees a threat. Many
of GM's moves in Brazil have reduced the number of people
needed per vehicle produced, particularly during final
assembly. That has been acceptable to Brazilian unions and
workers because GM has been steadily hiring employees as it
builds more factories for a market that has expanded briskly.
In the United States, GM's share of the stagnant American
car market has been shrinking for years and it has been
steadily closing factories as a result. So proposals to reduce
employment more quickly at the remaining factories have
alarmed an already angry United Automobile Workers union
and its workers.
Particularly galling for the union is that GM is cutting back in
the United States even as it builds new assembly plants in
Poland, China, Thailand and Argentina along Brazilian lines.
GM is "ignoring their social contract with America, by
transferring jobs, technology and capital from the U.S.," said
Richard Shoemaker, the UAW's vice president for GM
issues.
Strikes at two parts factories in Flint, Mich., have forced GM
to close 17 of its 29 North American assembly plants so far
for lack of parts. GM has temporarily laid off 71,700
workers, including 2,300 on Tuesday at an assembly plant in
Shreveport, La., that makes small pickup trucks.
In the course of expanding overseas, GM has discovered that
it can operate far more efficiently than in the United States.
That has been particularly true in Brazil.
The differences in GM operations start with the shape of the
factories: they are L-shaped or T-shaped in Brazil, while
GM's factories in the United States still tend to be gigantic
squares, with each side as long as several football fields. The
advantage of the Brazilian design is that it offers more
exterior walls for loading docks, which allows outside
suppliers to produce more of a vehicle.
Toyota has been asking its suppliers for years to deliver
partially assembled sections of cars, and it dramatically
reduces the number of assembly plant workers that are
needed. GM's operations in the United States have been slow
to learn from the company's 13-year-old joint venture to
build cars with Toyota in Fremont, Calif. But many of the
GM managers from that joint venture have gone on to Brazil,
including Hogan.
GM has been quietly talking to the UAW about building a
Brazilian-style factory with lots of loading docks in the
United States. The company is also trying to expand the role
that outside suppliers play even at existing American factories
with few loading docks. Other automakers are undertaking
similar experiments, including Volkswagen at one of its
Brazilian factories and Mercedes-Benz at factories in France
and at a non-union factory in Alabama. Ford and Chrysler
are moving in the same direction.
But while American automakers' assembly plants in the
United States are entirely unionized, most suppliers are not,
and that upsets the UAW. The suppliers' employees do not
pay union dues and commonly earn a third less than the $20
an hour paid to UAW members.
According to Shoemaker, one of the many thorny issues in
the Flint strike has been GM's desire to have metal stamping
equipment there maintained by outside contractors instead of
UAW workers.
GM's labor contracts effectively bar it from dismissing UAW
workers. But the company has tried for years to avoid
replacing workers who retire, and will have even less
incentive to hire new workers as it copies the Brazilian model
here. That alarms UAW members who want jobs for their
children.
GM's factories in Brazil have also embraced Japanese labor
practices, with workers and managers eating together and
with GM providing extensive information to the workers
about how each segment of an assembly line is doing in terms
of productivity and safety.
A few GM factory managers have taken the same approach
in the United States, but many factories retain a strong caste
system in which white-collar and blue-collar workers stay
apart while managers provide little information to assembly
line workers.
GM's high profits in Brazil have suffered this year as the
country's economy has slowed. But GM continues to invest
heavily there, contending that the market is growing and the
Brazilian operation's efficiency should be rewarded.
By contrast, GM has delayed investments in some American
factories, including those struck in Flint, while demanding
that the workers put in longer hours or make other changes to
improve productivity. The UAW contends that inadequate
investment and poor management is to blame for lagging
productivity, not the workers.
Although the current negotiations in Flint focus on narrow
issues of work rules and investment at GM auto parts
factories in Flint, the workers see the strike in international
terms. "GM is done with America," said Glenn Reynolds, a
57-year-old metal stamping worker on strike in Flint, as he
left his local union hall Tuesday.
GM insists that none of the foreign assembly plants being
built will be used to ship cars back to the United States.
For now, GM's international expansion has mostly hurt
American workers by limiting exports from the United States.
GM has been shipping Chevrolet Blazer sport utility vehicles
from Sao Jose dos Campos, Brazil, to Russia, for example,
even though GM's Blazer factory in Moraine, Ohio, is much
closer. |
